Poland shows little interest as the world's banks save
Interest rates should stabilize or end the year below current rates, despite a global rise in borrowing costs.
Buoyed by strong currencies and softening growth, many Central European countries are expected to swim against the global tide. Hungary has already cut its interest rate to nine percent from 9.5 and Poland kept its rate on hold at the year's first rate-setting meeting last Wednesday. Czech and Slovak policymakers are expected to follow suit.
According to Deutsche Bank: "We believe that the tightening cycle is now firmly over, with the focus set to shift to the timing of the first rate cut."
The central bank has said a shift to a neutral policy bias from the current restrictive stance was possible after an expected rise in inflation over the next few months, but warned the scope for easing was limited.
Analysts predict a half-point cut to six percent by year-end, but central bank chief Leszek Balcerowicz has also repeatedly stressed that despite some progress in reining in budget deficits, public spending remained too high.
Interest rates and inflation will have to be tightly controlled as Eastern European countries strive for euro membership. Most countries want to join the single currency before the end of the decade, but none expects to bring their budget deficit below three percent before 2007, which is one of the criteria for euro entry. (Reuters)
Buoyed by strong currencies and softening growth, many Central European countries are expected to swim against the global tide. Hungary has already cut its interest rate to nine percent from 9.5 and Poland kept its rate on hold at the year's first rate-setting meeting last Wednesday. Czech and Slovak policymakers are expected to follow suit.
According to Deutsche Bank: "We believe that the tightening cycle is now firmly over, with the focus set to shift to the timing of the first rate cut."
The central bank has said a shift to a neutral policy bias from the current restrictive stance was possible after an expected rise in inflation over the next few months, but warned the scope for easing was limited.
Analysts predict a half-point cut to six percent by year-end, but central bank chief Leszek Balcerowicz has also repeatedly stressed that despite some progress in reining in budget deficits, public spending remained too high.
Interest rates and inflation will have to be tightly controlled as Eastern European countries strive for euro membership. Most countries want to join the single currency before the end of the decade, but none expects to bring their budget deficit below three percent before 2007, which is one of the criteria for euro entry. (Reuters)
